The controversial trend of tacking on automatic tips to customer bills has attracted a lot of attention among the general public over the past couple of years, and in 2023 it also caught the eye of workers compensation officials.
In June, the National Council on Compensation Insurance filed changes to its manual on premium calculations to include the nondiscretionary tips. The move could raise costs for employers in NCCI states.
A story on experts’ reaction the change was the second-most-read workers compensation-related story on the Business Insurance website in 2023.
Despite the unpopularity among consumers, automatic gratuities have grown in recent years, with restaurant bills offering such explanations as “wellness fees,” “kitchen love” and “administration.”
Experts said the calculation change by the NCCI was in line with how the Internal Revenue Service looks at tips when calculating payroll. The IRS is also considering a change regarding who needs to report tips, which could be a driving force for mandatory fees attached to consumer bills.